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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| International Business Machines Corporation | LSE:IBM | London | Ordinary Share | COM STK USD0.20 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 118.95 | 4,029 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Communication Equip | 61.86B | 7.5B | 8.1833 | 20.74 | 155.63B |
TIDMIBM
IBM (NYSE:IBM) today announced third-quarter 2016 earnings results.
"IBM's third-quarter performance, led by continued double-digit growth in our strategic imperatives, is a testament to our leadership in cognitive solutions and cloud," said Ginni Rometty, IBM chairman, president and chief executive officer. "Our ability to apply deep expertise and breakthrough technology, led by Watson and the IBM Cloud, to massive amounts of data is enabling us to build new markets and transform industries. Whether it is banks implementing IBM blockchain solutions, hospitals leveraging Watson to fight cancer, or retailers using cognitive apps built on the IBM Cloud to transform the customer experience, clients across all industries are tapping into a new kind of innovation value from IBM."
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THIRD QUARTER 2016
Gross Profit
Diluted EPS Net Income Margin
GAAP from Continuing Operations $2.98 $2.9B 46.9%
Year/Year -1% -4% -2.1Pts
Operating (Non-GAAP) $3.29 $3.1B 48.0%
Year/Year -1% -4% -2.1Pts
Strategic
REVENUE Total IBM Imperatives Cloud
As reported (US$) $19.2B $8.0B $3.4B
Year/Year 0% 16% 44%
Year/Year adjusting for currency -1% 15% 42%
"Throughout the year, we have continued to invest where we see the greatest opportunities to create new markets and strengthen our enterprise IT leadership position," said Martin Schroeter, IBM senior vice president and chief financial officer. "This has included more than $12 billion across capital expenditures, R&D and acquisitions so far this year. At the same time, we have returned more than $6 billion to shareholders through dividends and share repurchases."
Strategic Imperatives
Third-quarter revenues from the company's strategic imperatives --- cloud, analytics, mobility and security --- increased 16 percent year to year (up 15 percent adjusting for currency). Cloud revenues (public, private and hybrid) for the quarter increased 44 percent (up 42 percent adjusting for currency). Cloud revenue over the trailing 12 months was $12.7 billion. The annual run rate for cloud as-a-Service revenue --- a subset of total cloud revenue --- increased to $7.5 billion from $4.5 billion in the third quarter of 2015. Revenues from analytics increased 15 percent (up 14 percent adjusting for currency). Revenues from mobile increased 19 percent and revenues from security increased 11 percent.
Full-Year 2016 Expectations
The company continues to expect operating (non-GAAP) diluted earnings per share of at least $13.50 and GAAP diluted earnings per share of at least $12.23. Operating (non-GAAP) diluted earnings per share exclude $1.27 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges. There is no change to IBM's previously-provided free cash flow guidance.
Cash Flow and Balance Sheet
The company generated net cash from operating activities of $4.2 billion; or $3.3 billion excluding Global Financing receivables. IBM's free cash flow was $2.4 billion in the third quarter. IBM returned $1.3 billion in dividends and $0.9 billion of gross share repurchases to shareholders. At the end of September 2016, IBM had $3.0 billion remaining in the current share repurchase authorization.
IBM ended the third-quarter 2016 with $10.0 billion of cash on hand. Debt, including Global Financing debt of $26.1 billion, totaled $42.5 billion. Core (non-Global Financing) debt totaled $16.4 billion. The balance sheet remains strong and is well positioned to support the business over the long term.
Segment Results
-- Cognitive Solutions (includes solutions software and transaction
processing software) -- revenues of $4.2 billion, up 4.5 percent.
Cloud revenue within the segment grew 74 percent (up 75 percent
adjusting for currency), and Solutions Software grew 8 percent.
-- Global Business Services (includes consulting, global process
services, application management) -- revenues of $4.2 billion,
down 0.4 percent (down 1.6 percent adjusting for currency). Strategic
imperatives revenue within the segment was up 13 percent (up 12
percent adjusting for currency).
-- Technology Services & Cloud Platforms (includes
infrastructure services, technical support services, integration
software) -- revenues of $8.7 billion, up 2.4 percent (up 1.4
percent adjusting for currency). Growth of 45 percent (up 42 percent
adjusting for currency) in strategic imperatives revenue within the
segment was driven by strong hybrid cloud services performance.
-- Systems (includes systems hardware and operating systems software)
-- revenues of $1.6 billion, down 21.0 percent (down 21.5 percent
adjusting for currency). Revenue reflects z Systems product cycle
dynamics.
-- Global Financing (includes financing and used equipment sales) --
revenues of $412 million, down 7.9 percent (down 9.2 percent adjusting
for currency).
Year-To-Date 2016 Results
Diluted earnings per share from continuing operations were $7.67, down 15 percent compared to the 2015 period. Net income from continuing operations for the nine months ended September 30, 2016 was $7.4 billion compared with $8.9 billion in the year-ago period, a decrease of 17 percent.
Consolidated net income was $7.4 billion compared to $8.7 billion in the year-ago period. Consolidated diluted earnings per share were $7.67 compared to $8.85, down 13 percent year to year. Revenues from continuing operations for the nine-month period totaled $58.1 billion, a decrease of 3 percent year to year (down 2 percent adjusting for currency) compared with $59.7 billion for the first nine months of 2015.
Operating (non-GAAP) diluted earnings per share from continuing operations were $8.59 compared with $10.09 per diluted share for the 2015 period, a decrease of 15 percent. Operating (non-GAAP) net income from continuing operations for the nine months ended September 30, 2016 was $8.3 billion compared with $10.0 billion in the year-ago period, a decrease of 17 percent.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: a downturn in economic environment and client spending budgets; the company's failure to meet growth and productivity objectives, a failure of the company's innovation initiatives; risks from investing in growth opportunities; failure of the company's intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; cybersecurity and data privacy considerations; fluctuations in financial results, impact of local legal, economic, political and health conditions; adverse effects from environmental matters, tax matters and the company's pension plans; ineffective internal controls; the company's use of accounting estimates; the company's ability to attract and retain key personnel and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; reliance on third party distribution channels and ecosystems; the company's ability to successfully manage acquisitions, alliances and dispositions; risks from legal proceedings; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company's Form 10-Qs, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission (SEC) or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements.
Presentation of Information in this Press Release
In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information which management believes provides useful information to investors:
IBM results --
-- presenting operating (non-GAAP) earnings per share amounts and related
income statement items;
-- adjusting for free cash flow;
-- adjusting for currency (i.e., at constant currency).
Free cash flow guidance is derived using an estimate of profit, working capital and operational cash outflows. The company views Global Financing receivables as a profit-generating investment, which it seeks to maximize and therefore it is not considered when formulating guidance for free cash flow. As a result, the company does not estimate a GAAP Net Cash from Operations expectation metric.
The rationale for management's use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.
Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/3q16.html. Presentation charts will be available shortly before the Webcast.
Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).
INTERNATIONAL
BUSINESS
MACHINES CORPORATION
COMPARATIVE
FINANCIAL
RESULTS
(Unaudited; Dollars
in millions
except per share
amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2016 2015* 2016 2015*
REVENUE
Cognitive Solutions $ 4,235 $ 4,052 $ 12,889 $ 12,616
Global Business 4,191 4,206 12,578 12,869
Services
Technology Services 8,748 8,541 26,029 25,993
& Cloud Platforms
Systems 1,558 1,973 5,184 6,656
Global Financing 412 447 1,245 1,386
Other 81 60 223 162
TOTAL REVENUE 19,226 19,280 58,149 59,682
GROSS PROFIT 9,013 9,436 27,401 29,278
GROSS PROFIT MARGIN
Cognitive Solutions 80.4 % 84.4 % 81.5 % 84.9 %
Global Business 28.8 % 29.7 % 27.0 % 28.2 %
Services
Technology Services 42.0 % 42.2 % 41.5 % 42.2 %
& Cloud Platforms
Systems 51.1 % 55.9 % 55.1 % 55.8 %
Global Financing 37.8 % 48.4 % 39.6 % 47.5 %
TOTAL GROSS PROFIT 46.9 % 48.9 % 47.1 % 49.1 %
MARGIN
EXPENSE AND OTHER
INCOME
S,G&A 4,732 4,731 16,093 15,273
R,D&E 1,397 1,287 4,320 3,885
Intellectual
property and
custom development (528 ) (188 ) (1,110 ) (489 )
income
Other (income) (8 ) (133 ) 281 (578 )
and expense
Interest expense 158 117 473 340
TOTAL EXPENSE AND 5,751 5,815 20,056 18,431
OTHER INCOME
INCOME FROM
CONTINUING
OPERATIONS
BEFORE INCOME TAXES 3,263 3,621 7,345 10,846
Pre-tax margin 17.0 % 18.8 % 12.6 % 18.2 %
Provision for 409 659 (31 ) 1,943
/ (Benefit)
from income taxes
Effective tax rate 12.5 % 18.2 % (0.4 %) 17.9 %
INCOME FROM $ 2,854 $ 2,962 $ 7,375 $ 8,904
CONTINUING
OPERATIONS
DISCONTINUED
OPERATIONS
Loss (1 ) (12 ) (4 ) (176 )
from discontinued
operations,
net of taxes
NET INCOME $ 2,853 $ 2,950 $ 7,371 $ 8,727
EARNINGS PER SHARE
OF COMMON STOCK:
Assuming Dilution
Continuing $ 2.98 $ 3.02 $ 7.67 $ 9.03
Operations
Discontinued $ 0.00 ($0.01 ) $ 0.00 ($0.18 )
Operations
TOTAL $ 2.98 $ 3.01 $ 7.67 $ 8.85
Basic
Continuing $ 2.99 $ 3.04 $ 7.70 $ 9.07
Operations
Discontinued $ 0.00 ($0.01 ) $ 0.00 ($0.18 )
Operations
TOTAL $ 2.99 $ 3.03 $ 7.70 $ 8.89
WEIGHTED-AVERAGE
NUMBER
OF COMMON SHARES
OUTSTANDING (M's):
Assuming Dilution 957.3 979.0 960.7 986.0
Basic 954.0 975.1 957.7 981.8
* Recast to conform
with 2016
segment
presentation.
INTERNATIONAL BUSINESS
MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
At At
(Dollars in Millions) September 30, December 31,
2016 2015
ASSETS:
Current Assets:
Cash and cash equivalents $ 9,039 $ 7,686
Marketable securities 929 508
Notes and accounts receivable 8,291 8,333
- trade, net
Short-term financing receivables, net 16,032 19,020
Other accounts receivable, net 873 1,201
Inventory 1,729 1,551
Prepaid expenses and 4,539 4,205
other current assets
Total Current Assets 41,433 42,504
Property, plant and equipment, net 11,104 10,727
Long-term financing receivables, net 8,936 10,013
Prepaid pension assets 3,487 1,734
Deferred taxes 4,289 4,822
Goodwill and intangibles, net 41,282 35,508
Investments and sundry assets 5,075 5,187
Total Assets $ 115,606 $ 110,495
LIABILITIES:
Current Liabilities:
Taxes $ 2,137 $ 2,847
Short-term debt 6,920 6,461
Accounts payable 5,271 6,028
Deferred income 10,815 11,021
Other liabilities 9,304 7,913
Total Current Liabilities 34,447 34,269
Long-term debt 35,563 33,428
Retirement related obligations 16,688 16,504
Deferred income 3,611 3,771
Other liabilities 8,138 8,099
Total Liabilities 98,447 96,071
EQUITY:
IBM Stockholders' Equity:
Common stock 53,759 53,262
Retained earnings 149,585 146,124
Treasury stock -- at cost (158,170 ) (155,518 )
Accumulated other comprehensive (28,164 ) (29,607 )
income/(loss)
Total IBM stockholders' equity 17,010 14,262
Noncontrolling interests 149 162
Total Equity 17,159 14,424
Total Liabilities and Equity $ 115,606 $ 110,495
INTERNATIONAL
BUSINESS
MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited)
Three Months Ended Nine Months Ended
(Dollars in September 30, September 30,
Millions)
2016 2015 2016 2015
Net Cash Provided $ 4,213 $ 4,235 $ 13,301 $ 11,729
by Operating
Activities per GAAP:
Less: change
in Global
Financing (GF)
Receivables 934 749 3,647 1,962
Capital Expenditures, (851 ) (934 ) (2,801 ) (2,764 )
Net
Free Cash Flow 2,428 2,553 6,854 7,003
Acquisitions (40 ) (112 ) (5,445 ) (821 )
Divestitures 0 (568 ) 35 (488 )
Dividends (1,337 ) (1,271 ) (3,927 ) (3,636 )
Share Repurchase (856 ) (1,542 ) (2,632 ) (3,846 )
Non-GF Debt (1,696 ) 379 3,365 770
Other (includes 853 1,370 3,523 2,108
GF Receivables
and GF Debt)
Change in Cash, Cash
Equivalents and
Short-term ($648 ) $ 808 $ 1,773 $ 1,091
Marketable
Securities
INTERNATIONAL
BUSINESS
MACHINES CORPORATION
CASH FLOW
(Unaudited)
Three Months Ended Nine Months Ended
(Dollars in September 30, September 30,
Millions)
2016 2015 2016 2015
Net Income from $ 2,853 $ 2,950 $ 7,371 $ 8,727
Operations
Depreciation/Amortization 1,126 936 3,253 2,865
of Intangibles
Stock-based 142 111 403 369
Compensation
Working Capital (842 ) (522 ) (1,373 ) (2,243 )
/ Other
Global Financing A/R 934 749 3,647 1,962
Loss 0 12 0 48
on Microelectronics
Business Disposal
Net Cash Provided by $ 4,213 $ 4,235 $ 13,301 $ 11,729
Operating Activities
Capital (851 ) (934 ) (2,801 ) (2,764 )
Expenditures,
net
of payments
& proceeds
Divestitures, net of 0 (568 ) 35 (488 )
cash transferred
Acquisitions, net (40 ) (112 ) (5,445 ) (821 )
of cash acquired
Marketable (159 ) 272 610 1,358
Securities
/
Other Investments,
net
Net Cash Used ($1,050 ) ($1,343 ) ($7,600 ) ($2,714 )
in Investing
Activities
Debt, net of (2,041 ) 915 1,888 (607 )
payments
& proceeds
Dividends (1,337 ) (1,271 ) (3,927 ) (3,636 )
Common Stock (856 ) (1,542 ) (2,632 ) (3,846 )
Repurchases
Common Stock 52 51 166 271
Transactions
- Other
Net Cash Used ($4,182 ) ($1,848 ) ($4,504 ) ($7,818 )
in Financing
Activities
Effect of Exchange 41 42 155 (194 )
Rate
changes on Cash
Net Change in Cash ($978 ) $ 1,087 $ 1,352 $ 1,004
& Cash Equivalents
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
SEGMENT
DATA
(Unaudited)
THIRD - QUARTER 2016
Cognitive Solutions &
Industry Services
Technology
Global Services &
(Dollars Cognitive Business Cloud Global
in
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $ 4,235 $ 4,191 $ 8,748 $ 1,558 $ 412
Internal 667 93 180 176 352
Total $ 4,902 $ 4,284 $ 8,929 $ 1,734 $ 763
Segment
Revenue
Pre-tax 1,574 544 1,288 136 355
Income
from
Continuing
Operations
Pre-tax 32.1 % 12.7 % 14.4 % 7.8 % 46.5 %
margin
Change 4.5 % (0.4 )% 2.4 % (21.0 )% (7.9 )%
YTY
Revenue
-
External
Change 4.5 % (1.6 )% 1.4 % (21.5 )% (9.2 )%
YTY
Revenue
-
External
@constant
currency
THIRD - QUARTER 2015*
Cognitive Solutions &
Industry Services
Technology
Global Services &
(Dollars Cognitive Business Cloud Global
in
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $ 4,052 $ 4,206 $ 8,541 $ 1,973 $ 447
Internal 528 120 161 209 584
Total $ 4,580 $ 4,326 $ 8,702 $ 2,182 $ 1,031
Segment
Revenue
Pre-tax 1,596 664 1,317 248 562
Income
from
Continuing
Operations
Pre-tax 34.9 % 15.4 % 15.1 % 11.4 % 54.5 %
margin
* Recast
to
conform
with
2016
segment
presentation.
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
SEGMENT
DATA
(Unaudited)
NINE - MONTHS 2016
Cognitive Solutions &
Industry Services
Technology
Global Services &
(Dollars Cognitive Business Cloud Global
in
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $ 12,889 $ 12,578 $ 26,029 $ 5,184 $ 1,245
Internal 1,929 310 501 594 1,340
Total $ 14,818 $ 12,888 $ 26,530 $ 5,778 $ 2,585
Segment
Revenue
Pre-tax 4,039 1,210 2,825 354 1,208
Income
from
Continuing
Operations
Pre-tax 27.3 % 9.4 % 10.6 % 6.1 % 46.7 %
margin
Change 2.2 % (2.3 )% 0.1 % (22.1 )% (10.2 )%
YTY
Revenue
-
External
Change 2.9 % (2.2 )% 1.0 % (21.9 )% (8.5 )%
YTY
Revenue
-
External
@constant
currency
NINE - MONTHS 2015*
Cognitive Solutions &
Industry Services
Technology
Global Services &
(Dollars Cognitive Business Cloud Global
in
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $ 12,616 $ 12,869 $ 25,993 $ 6,656 $ 1,386
Internal 1,695 380 500 571 1,874
Total $ 14,311 $ 13,249 $ 26,493 $ 7,226 $ 3,261
Segment
Revenue
Pre-tax 4,949 1,895 3,861 1,048 1,690
Income
from
Continuing
Operations
Pre-tax 34.6 % 14.3 % 14.6 % 14.5 % 51.8 %
margin
* Recast
to
conform
with
2016
segment
presentation.
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
U.S. GAAP TO
OPERATING
(Non-GAAP)
RESULTS
RECONCILIATION
(Unaudited;
Dollars
in millions
except per share
amounts)
THIRD - QUARTER 2016
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross Profit $ 9,013 $ 129 $ 79 $ 9,221
Gross Profit 46.9 % 0.7Pts 0.4Pts 48.0 %
Margin
S,G&A 4,732 (138 ) (53 ) 4,541
R,D&E 1,397 - (7 ) 1,390
Other (Income) (8 ) (2 ) - (10 )
& Expense
Total Expense & 5,751 (140 ) (60 ) 5,550
Other (Income)
Pre-tax Income 3,263 269 139 3,671
from
Continuing
Operations
Pre-tax Income 17.0 % 1.4Pts 0.7Pts 19.1 %
Margin from
Continuing
Operations
Provision for 409 73 40 521
Income
Taxes***
Effective 12.5 % 1.1Pts 0.7Pts 14.2 %
Tax Rate
Income from 2,854 197 99 3,149
Continuing
Operations
Income Margin 14.8 % 1.0Pts 0.5Pts 16.4 %
from
Continuing
Operations
Diluted Earnings $ 2.98 $ 0.21 $ 0.10 $ 3.29
Per Share:
Continuing
Operations
THIRD - QUARTER 2015
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross Profit $ 9,436 $ 89 $ 118 $ 9,643
Gross Profit 48.9 % 0.5Pts 0.6Pts 50.0 %
Margin
S,G&A 4,731 (76 ) (74 ) 4,581
R,D&E 1,287 - (12 ) 1,275
Other (Income) (133 ) 0 - (133 )
& Expense
Total Expense & 5,815 (76 ) (86 ) 5,652
Other (Income)
Pre-tax Income 3,621 165 204 3,991
from
Continuing
Operations
Pre-tax Income 18.8 % 0.9Pts 1.1Pts 20.7 %
Margin from
Continuing
Operations
Provision for 659 (5 ) 64 718
Income
Taxes***
Effective 18.2 % -0.9Pts 0.7Pts 18.0 %
Tax Rate
Income from 2,962 170 140 3,272
Continuing
Operations
Income Margin 15.4 % 0.9Pts 0.7Pts 17.0 %
from
Continuing
Operations
Diluted Earnings $ 3.02 $ 0.18 $ 0.14 $ 3.34
Per Share:
Continuing
Operations
* Includes amortization of purchased intangible assets, in
process R&D, severance cost for acquired employees,
vacant space for acquired companies, deal costs
and acquisition integration tax charges.
** Includes retirement-related interest cost, expected return on
plan assets, recognized actuarial losses or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer plans and insolvency insurance.
*** Tax impact on operating (non-GAAP) pre-tax income from continuing
operations is calculated under the same accounting principles
applied to the As Reported pre-tax income under ASC 740, which
employs an annual effective tax rate method to the results.
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
U.S. GAAP
TO
OPERATING
(Non-GAAP)
RESULTS
RECONCILIATION
(Unaudited;
Dollars
in millions
except per
share
amounts)
NINE - MONTHS 2016
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross $ 27,401 $ 371 $ 238 $ 28,010
Profit
Gross 47.1 % 0.6Pts 0.4Pts 48.2 %
Profit
Margin
S,G&A 16,093 (365 ) (183 ) 15,545
R,D&E 4,320 - (23 ) 4,297
Other 281 (7 ) - 274
(Income)
& Expense
Total Expense 20,056 (372 ) (206 ) 19,478
&
Other
(Income)
Pre-tax 7,345 743 444 8,532
Income
from
Continuing
Operations
Pre-tax 12.6 % 1.3Pts 0.8Pts 14.7 %
Income
Margin from
Continuing
Operations
Provision (31 ) 201 106 277
for
/ (Benefit)
from Income
Taxes***
Effective (0.4 )% 2.5Pts 1.4Pts 3.2 %
Tax Rate
Income from 7,375 542 338 8,255
Continuing
Operations
Income 12.7 % 0.9Pts 0.6Pts 14.2 %
Margin
from
Continuing
Operations
Diluted $ 7.67 $ 0.57 $ 0.35 $ 8.59
Earnings
Per Share:
Continuing
Operations
NINE - MONTHS 2015
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross $ 29,278 $ 268 $ 350 $ 29,896
Profit
Gross 49.1 % 0.4Pts 0.6Pts 50.1 %
Profit
Margin
S,G&A 15,273 (230 ) (445 ) 14,598
R,D&E 3,885 - (36 ) 3,849
Other (578 ) (5 ) - (583 )
(Income)
& Expense
Total Expense 18,431 (235 ) (481 ) 17,715
&
Other
(Income)
Pre-Tax 10,846 503 831 12,181
Income
from
Continuing
Operations
Pre-tax 18.2 % 0.8Pts 1.4Pts 20.4 %
Income
Margin from
Continuing
Operations
Provision 1,943 52 234 2,228
for
Income
Taxes***
Effective 17.9 % -0.3Pts 0.7Pts 18.3 %
Tax Rate
Income from 8,904 452 597 9,953
Continuing
Operations
Income 14.9 % 0.8Pts 1.0Pts 16.7 %
Margin
from
Continuing
Operations
Diluted $ 9.03 $ 0.46 $ 0.60 $ 10.09
Earnings
Per Share:
Continuing
Operations
* Includes amortization of purchased intangible assets, in
process R&D, severance cost for acquired employees,
vacant space for acquired companies, deal costs
and acquisition integration tax charges.
** Includes retirement-related interest cost, expected return on
plan assets, recognized actuarial losses or gains, amortization
of transition assets, other settlements, curtailments,
multi-employer plans and insolvency insurance.
*** Tax impact on operating (non-GAAP) pre-tax income from continuing
operations is calculated under the same accounting principles
applied to the As Reported pre-tax income under ASC 740, which
employs an annual effective tax rate method to the results.
INTERNATIONAL BUSINESS MACHINES CORPORATION
RECONCILIATION OF OPERATING EARNINGS PER SHARE
(Unaudited)
2016
EPS Guidance Expectations
IBM GAAP EPS at least $12.23
IBM Operating EPS (non-GAAP) at least $13.50
Adjustments
Acquisition related charges * $0.84
Non-Operating Retirement-Related Items $0.43
* Includes acquisitions through September 30, 2016
IBMIan Colley, 914-434-3043colley@us.ibm.comorJohn Bukovinsky, 732-618-3531jbuko@us.ibm.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20161017006476/en/
This information is provided by Business Wire
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October 18, 2016 02:00 ET (06:00 GMT)
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